SAP operating profit drops but cloud offers optimism

German business software provider SAP SE has reported a slight, 3 per cent drop in operating profit for the fourth quarter of 2015, even as it laid out an optimistic guidance for 2016.

After an initial review of its fourth quarter 2015 performance, SAP today announced its preliminary financial results for the fourth quarter and full year ended 31 December, 2015. All 2015 figures in this release are approximate due to the preliminary nature of the announcement.

  • Full Year Non-IFRS Cloud and Software Revenue Up 20 per cent (12 per cent at Constant Currencies, Beating Company Guidance)
  • SAP S/4HANA Adoption Surges – More Than Doubling the Number of Customers in the Fourth Quarter, Now Exceeding 2,700 Customers
  • Tremendous Momentum in New Cloud Bookings – Up 103 per cent in the Full Year, Up 75 per cent in the Fourth Quarter
  • Full Year Non-IFRS Cloud Subscription and Support Revenue Up 109 per cent to €2.30 Billion (€2.00 Billion at Constant Currencies, Achieving Company Guidance)
  • Full Year Non-IFRS Operating Profit Up 13 per cent to €6.35 Billion (€5.902 Billion at Constant Currencies, Beating Company Guidance)

SAP had exceptional momentum with fast growth in cloud and double-digit growth in its core license business in the fourth quarter. For the full year, non-IFRS cloud and software revenue grew by 20 per cent. New cloud bookings, the key measure for SAP's sales success in the cloud, increased 103 per cent in the full year to €0.89 billion and 75 per cent in the fourth quarter to €0.35 billion.

"We decisively beat our full year guidance for cloud and software revenue," said Bill McDermott, CEO of SAP. "SAP gained significant share against core and best of breed competitors. Across markets and industries SAP is extending its lead as the trusted innovator in the business software industry.

"Our completeness of vision in the cloud and soaring adoption of S/4HANA gives us tremendous confidence in our business in 2016 and beyond."

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